To The Moon

While many retailers across the country are seeing their sales take a dip as consumers tighten their spending, $Wal-Mart(WMT)$, the largest US retailer managed to keep its sales afloat. (see below)

Walmart Q1 2026 - Earnings per share

In its first-quarter earnings report for fiscal year 2026, Walmart revealed that its US comparable sales increased by +4.5% YoY, and (i) average number of transactions and (ii) amount of money shoppers spent per purchase - spiked.

Walmart Q1 2026 - Revenue

This increases contributed to Walmart’s $5.7 billion sales in its US operating income, that is +7% YoY gain.

On 15 May 2025 during its earnings call, CEO, Doug McMillon said:

• Increased sales were not driven by inflation but higher transactions.

• Despite increased sales in health and grocery categories, WMT has noticed customers are pulling back their spending in other areas.

• “Health & Wellness” sales increased high teens, reflecting higher prescription volumes and over-the-counter sales.

• General merchandise sales declined slightly with softness in (a) Electronics, (b) Home products, and (c) Sporting goods.

News - good and not-so- good

But it was not all good news during earnings call, CEO has warned:

• WMT’s merchandise future prices (are at risk) amid Trump’s ever-changing tariff policy.

• Despite Trump’s recent efforts to lower tariffs, Walmart still would not be able to fully absorb all the extra costs it will face to import goods.

• Especially so Chinese imports that despite a “reduced” levy, the 90-days +30% interim tax is still very ‘high’.

• WMT has a strategic plan in-placed, to diversify its supply chain and reduce exposure to tariff-related risks.

• Between 2018 - 2023, Walmart’s imports from India surged to 25%, from 2%.

• At the same time, Chinese imports have been reduced to 60% from 80%.

• WMT endeavours to keep prices as low as possible.

• Given the magnitude of the tariffs, even at the reduced levels announced, WMT will not be able to absorb all the pressure given the reality of narrow retail margins.

• For necessity like food, Trump’s tariffs (on Costa Rica, Peru & Colombia) are pressuring imported essentials like bananas, avocados, coffee, and even roses.

• Customers will see higher prices for goods as a result of tariffs as early as June 2025.

Not So Fast !

Two days later, on 17 May 2025, Trump posted on his propaganda platform, Truth Social - demanding Walmart to "eat the tariffs" and not raise prices.

He also categorically stated that Walmart should stop blaming tariffs for price hikes and just absorb the costs. (see below)

On Tue, 29 Apr 2025, Trump was able to torpedo $Amazon.com(AMZN)$ plan to display the tariff amount for each item, separately on its eCommerce platform.

Will he get his way with Walmart, this time as well?

Firstly, there is no law or regulation that compels a private retailer like Walmart to absorb tariff costs instead of passing them to consumers.

Secondly, price-setting decisions in US are generally left to the discretion of businesses, provided they comply with the general consumer protection and antitrust laws.

The good news is there are no direct legal penalties or regulatory actions the Trump administration can impose, if Walmart does not comply with Trump’s demand.

Of course, Trump will resort to public pressure or verbal abuse of Walmart, like what he has been doing to US Federal Reserves’ chair - Jerome Powell.

Relying on threat (eg. clash with China) is also his signature style - threatening Walmart further scrutiny or regulatory action in unrelated areas.

Beauty In Numbers.

Honestly, Walmart is but joining a growing number of companies that have increased prices or warned that higher prices are coming due to Trump’s tariffs.

On 01 May 2025, $Microsoft(MSFT)$ said that it has increased the recommended retail prices of Xbox video game consoles and some controllers. (see below)

On 06 May 2025, Barbie maker $Mattel(MAT)$ announced it is moving production out of China, but still expected to have price increases its toys. (see below)

On 08 May 2025, $Ford(F)$ warned last week it would have to raise prices on some cars. (see below)

As more and more US businesses take to raising their prices, Trump will not be able to demand them to “eat the tariffs”, short of putting them out of businesses, causing job losses. It’s a checkmate he failed to foresee.

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